Port Elizabeth‘s first scooter and motorcycle assembly plant has been established in Markman industrial township after a R20-million investment by Italian company Ala Manufacturing.

This could prove a boon for component suppliers in the city, as the company intends producing its range of 50cm³ to 150cm³ automatic-gearbox motorcycles with 100% local content within a year.

Company MD Baiocco Massimo said that currently 10% content was local, but that it was gearing up for full local production.

Ala‘s location in Port Elizabeth was facilitated by the Eastern Cape Development Corporation, which assisted with establishing relations with institutional, accounting and financial partners as well as local suppliers and government services.

“This multi-million-rand investment in the province creates spin- offs and business opportunities, specifically in the local supplier base of the automotive industry,” said acting ECDC enterprise promotion manager Pierre Leppan.

There are also strong job creation implications as the company already employs 20 staff – expected to grow to 80 by the end of its first year. The initial staff comprise some Italian professionals and specialists who will be sharing their skills with local employees.

Massimo said the company aimed to sell into the local market, while exports to the SADC region and beyond would follow, hopefully within the year.

The company has set itself a target of selling 5 000 units in the first year, with a projection of sales of up to 15 000 units the following year.

Massimo said 20 dealers had already been signed and there was increasing demand from more dealers wanting to represent the Ala brand. This dealer network would include sales agents as well as an after-sales service network.

“We expect that this will result in the progressive appointment of dealers which should stimulate consumer demand of our products,” said manufacturing director Vittorio Rizzato.

At a retail price of between R6 200 and R13 000, it is easy to comprehend the growth in retailer interest.

Rizzato said positive market conditions in South Africa showed the potential of high consumer demand for the two-wheelers.

He said Ala had considered a number of other locations in South America and North Africa for its new operations before settling on South Africa. The decision was influenced by the country‘s financial reliability, lower labour costs, increasing consumer spending power as well as its business system.

Picture: Nosipho Mbontyeni of Ala Manufacturing